Contractibility and the Design of Research Agreements

• 成果类型: Article
• 署名作者: Lerner, Josh; Malmendier, Ulrike
• 署名单位: Harvard University; University of California System; University of California Berkeley; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.100.1.214
• 发表日期: 2010
• 页码: 214-246
• 关键词: asset ownership; incomplete contracts; empirical-analysis; reputation

摘要

We analyze how contractibility affects contract design A major concern when designing research agreements is that researchers use their funding to subsidize other projects We show that, when research activities are not contractible, an option contract is optimal. The financing firm obtains the option to terminate the agreement and, in case of termination, broad property rights. The threat of termination deters researchers from cross-subsidization, and the cost of exercising the termination option deters the financing firm from opportunistic termination. We test this prediction using 580 biotechnology research agreements Contracts with termination options are more common when research is non-contractible